Solvay: stock down on broker comments

(CercleFinance.com) - Solvay shares were down on the Brussels Stock Exchange on Monday, the victim of Deutsche Bank comments, which now considers the chemical group to be fairly valued.


Just after noon, Solvay was down by around 0.2%, one of the most heavily traded stocks on the BEL 20 index.

Analysts at Deutsche Bank point out that the chemical company's share price has risen by 33% since they initiated a buy rating on 12 December.

The broker attributes this upward movement to improving economic conditions, renewed optimism about the sector and the entry of US fund Greenlight into its capital.

However, with a FCF/dividend yield of 8% and trading at an EV/Ebitda multiple of 6.3x, the 'new' Solvay stock (post-spin-off from Syensqo) is trading at much higher levels than that of the 'old Solvay', DB believes, which leads it to see only limited potential at present.

Deutsche Bank has therefore downgraded its buy recommendation to 'hold', with a target price maintained at E31.


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